What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-02-09 · 94 added, 148 removed, 176 unchanged (58% of the section changed)

15 unchanged sentences

employee misconduct or misconduct by third parties;

uncertainties associated with management turnover and the effective succession of senior management;

uncertainties associated with management turnover and the effective succession of senior management, including the recent CEO transition and ongoing search for a permanent replacement;

media and public characterization of consumer installment loans;

3 unchanged sentences

changes in interest rates;

the impact of inflation;

the impact of inflation and macroeconomic uncertainty;

risks relating to the acquisition or sale of assets or businesses or other strategic initiatives, including increased loan delinquencies or net charge-offs, the loss of key personnel, integration or migration issues, the failure to achieve anticipated synergies, increased costs of servicing, incomplete records, and retention of customers;

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The following table sets forth certain information derived from the Company's Consolidated Statements of Operations and Consolidated Balance Sheets (unaudited), as well as operating data and ratios, for the periods indicated:

Three months ended December 31, Nine months ended December 31,

2025 2024 2025 2024

Three months ended June 30,

(Dollars in thousands)

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Operating income as a % of total revenue (4)

8.3 % 19.7 % 8.8 % 22.1 %

Loan volume (5)

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_______________________________________________________

(1) Average gross loans receivable has been determined by averaging month-end gross loans receivable over the indicated period, excluding TALs.

(1) Average gross loans receivable has been determined by averaging month-end gross loans receivable over the indicated period.

(2) Net loans receivable is defined as gross loans receivable less unearned interest and deferred fees.

(3) Average net loans receivable has been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding TALs.

(3) Average net loans receivable has been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period.

(4) Operating income is computed as total revenue less provision for credit losses and general and administrative expenses.

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It does not include loans purchased through acquisitions.

Comparison of three months ended December 31, 2025 versus three months ended December 31, 2024

Gross loans outstanding increased to $1.4 billion as of December 31, 2025, a 1.5% increase from the $1.38 billion of gross loans outstanding as of December 31, 2024, which is a substantial improvement from the 4.0% year over year decrease as of March 31, 2025.

During the most recent quarter, gross loans outstanding increased sequentially 6.6%, or $86.8 million, from $1.32 billion as of September 30, 2025, compared to an increase of 6.6%, or $85.6 million, in the comparable quarter of the prior year.

During the most recent quarter, our new and current customer borrowing increased when comparing the same quarter of fiscal 2025.

Specifically, during the quarter, new and refinance customer loan volume increased 16.6% and 8.0% respectively, compared to the same quarter of fiscal 2025.

Our customer base increased by 4.1% during the twelve-month period ended December 31, 2025, compared to an increase of 3.7% for the comparable period ended December 31, 2024.

During the three months ended December 31, 2025 our unique borrowers increased by 4.2% compared to an increase of 6.2% during the three months ended December 31, 2024.

The $0.9 million net loss for the three months ended December 31, 2025 is a 106.8% decrease from net income of $13.4 million for the same period of the prior year.

Operating income, which is revenue less provision for credit losses and general and administrative expenses, decreased by $15.5 million, or 56.9%, compared to the same period of the prior year.

Our results of operations were negatively impacted by an increase in provision for credit losses, largely related to our new loan growth;

however, we expect solid returns on our fiscal 2026 originations given early payment performance and yield.

Further, the current third quarter included $5.4 million in share based compensation expense, which is a $5.0 million increase compared to the same quarter of the prior year due to share grants in December of 2024 and June of 2025.

Revenues for the three months ended December 31, 2025 increased by $2.6 million, or 1.9%, to $141.3 million from $138.6 million for the same period of the prior year.

Interest and fee income for the three months ended December 31, 2025 increased by $3.6 million, or 2.9%, from the same period of the prior year due to an increase in outstanding balances and interest yields.

Insurance and other income for the three months ended December 31, 2025 decreased by $1.0 million, or 5.9%, from the same period of the prior year.

Insurance income remained relatively flat at $12.5 million during the three months ended December 31, 2025 when compared to the three months ended December 31, 2024.

Other income decreased $1.0 million, or 25.5%, to $2.8 million in the third quarter of fiscal 2026, compared to $3.8 million in the third quarter of fiscal 2025.

The provision for credit losses increased $7.3 million, or 16.6%, to $51.4 million from $44.1 million when comparing the third quarter of fiscal 2026 to the third quarter of fiscal 2025.

Comparison of three months ended June 30, 2026 versus three months ended June 30, 2025

Gross loans outstanding increased to $1.29 billion as of June 30, 2026, a 2.3% increase from the $1.26 billion of gross loans outstanding as of June 30, 2025.

During the most recent quarter, our existing customer borrowing increased, while our new customer borrowing decreased, compared to the same quarter of fiscal 2026.

New customer loan volume decreased 40.1%, compared to the same quarter of fiscal year 2026.

At the end of the prior fiscal year, we tightened our underwriting of new customers given the proportion of new customers already in the portfolio and increasing macroeconomic uncertainty.

As a result, our customer base decreased by 1.9% during the twelve-month period ended June 30, 2026, compared to an increase of 4.0% for the comparable period ended June 30, 2025.

We have since expanded underwriting and expect to carefully increase new customer lending in the coming quarters.

The $6.1 million net income for the three months ended June 30, 2026 is a 285.4% increase from net income of $1.6 million for the same period of the prior year.

Operating income, which is revenue less provision for credit losses and general and administrative expenses, increased by $7.4 million, or 62.4%, compared to the same period of the prior year.

Revenues for the three months ended June 30, 2026 increased by $6.4 million, or 4.8%, to $139.2 million from $132.8 million for the same period of the prior year.

Interest and fee income for the three months ended June 30, 2026 increased by $6.2 million, or 5.4%, from the same period of the prior year due to an increase in outstanding balances and interest yields.

Insurance and other income for the three months ended June 30, 2026 increased by $0.2 million, or 1.3%, from the same period of the prior year.

Insurance income remained essentially unchanged at $11.3 million in the first quarter of fiscal 2027 compared to $11.5 million in the first quarter of fiscal 2026.

Other income increased $0.5 million, or 7.7%, to $6.4 million in the first quarter of fiscal 2027, compared to $5.9 million in the first quarter of fiscal 2026.

The provision for credit losses decreased $6.7 million, or 13.4%, to $43.8 million from $50.5 million when comparing the first quarter of fiscal 2027 to the first quarter of fiscal 2026.

The table below itemizes the key components of the CECL allowance and provision impact during the quarter.

CECL Allowance and Provision (Dollars in millions) Q1 FY 2027 Q1 FY 2026 Difference Reconciliation

Beginning Allowance - September 30 $117.8 $114.5 $3.3

Beginning Allowance - March 31 $112.0 $103.4 $8.6

Change due to Growth $1.2 $3.3 $(2.1) $(2.1)

1 unchanged sentence

Change due to 90 days past due $(2.1) $(3.3) $1.2 $1.2

Ending Allowance - December 31 $122.6 $116.2 $6.4 $3.1

Ending Allowance - June 30 $112.5 $109.1 $3.4 $(5.2)

Net Charge-offs $43.3 $44.8 $(1.5) $(1.5)

1 unchanged sentence

The change in allowance for the quarter plus net charge-offs for the quarter equals the provision for the quarter (see above reconciliation).

The provision was negatively impacted by an increase in net charge-offs and growth in new customers during the quarter.

Our 0-5 month customers increased as a percentage of the portfolio from 8.6% as of September 30, 2025 to 9.9% as of December 31, 2025.

This led to an increase in the overall expected loss rates of the portfolio during the quarter.

Net charge-offs for the quarter increased $4.2 million, from $42.4 million in the third quarter of fiscal 2025 to $46.6 million in the third quarter of fiscal 2026.

Net charge-offs as a percentage of average net loan receivables on an annualized basis increased to 18.7% in the third quarter of fiscal 2026 from 17.2% in the third quarter of fiscal 2025.

Net charge-offs increased due to the increase in new customers in the twelve months ending September 30, 2025.

The Company's allowance for credit losses as a percentage of net loans was 11.8% at December 31, 2025 compared to 11.4% at December 31, 2024.

Accounts that were 61 days or more past due on a recency basis decreased to 5.6% at December 31, 2025 compared to 5.7% at December 31, 2024.

Recency delinquency on accounts at least 90 days past due remained relatively flat at 3.4% at December 31, 2025, compared to December 31, 2024.

Recency delinquency on accounts 0 to 60 days past due decreased from 20.0% at December 31, 2024, to 18.1% at December 31, 2025.

G&A expenses for the three months ended December 31, 2025 increased by $10.8 million, or 16.1%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses increased from 48.5% during the three months ended December 31, 2024 to 55.3% during the three months ended December 31, 2025.

Net charge-offs for the quarter decreased $1.5 million, from $44.8 million in the first quarter of fiscal 2026 to $43.3 million in the first quarter of fiscal 2027.

Net charge-offs as a percentage of average net loan receivables on an annualized basis decreased to 18.2% in the first quarter of fiscal 2027 from 19.4% in the first quarter of fiscal 2026.

Net charge-offs decreased due to the decrease in new customers during the twelve-month period ending June 30, 2026.

Additionally, net charge-offs during the quarter include recoveries of $1.6 million related to a bulk sale of prior charge-offs.

The Company's allowance for credit losses as a percentage of net loans was 11.8% at June 30, 2026 compared to 11.6% at June 30, 2025.

Accounts that were 61 days or more past due on a recency basis decreased to 5.2% at June 30, 2026 compared to 5.4% at June 30, 2025.

Recency delinquency on accounts 0 to 60 days past due decreased from 19.2% at June 30, 2025, to 18.1% at June 30, 2026.

G&A expenses for the three months ended June 30, 2026 increased by $5.8 million, or 8.2%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses increased from 53.0% during the three months ended June 30, 2025 to 54.7% during the three months ended June 30, 2026.

G&A expenses per average open branch increased by 9.4% when comparing the two three-month periods.

G&A expenses were negatively impacted during the current quarter by $4.6 million in CEO transition related expense.

The change in G&A expense is explained in greater detail below.

Personnel expense totaled $51.3 million for the three months ended December 31, 2025, a $10.2 million, or 24.9%, increase over the three months ended December 31, 2024.

Salary expense increased approximately $2.8 million, or 8.7%, during the quarter ended December 31, 2025, compared to the quarter ended December 31, 2024.

Our headcount as of December 31, 2025 increased 10.2% compared to December 31, 2024.

Benefit expense increased approximately $0.8 million, or 10.1%, when comparing the quarterly periods ended December 31, 2025 and 2024.

Incentive expense increased $6.9 million in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025.

The increase in incentive expense is primarily due to a $5.0 million increase in share based compensation expense.

Share based compensation expense increased due to share grants in December of 2024 and June of 2025.

There was also a

significant increase in field level incentives.

Over the last several months we have increased headcount in the field to further improve branch level performance.

Occupancy and equipment expense totaled $12.4 million for the three months ended December 31, 2025, a $0.1 million, or 1.2%, increase over the three months ended December 31, 2024.

Advertising expense decreased $0.7 million, or 15.5%, in the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 due to increased efficiency in our customer acquisition programs.

Amortization of intangible assets totaled $0.8 million for the three months ended December 31, 2025, a $0.2 million, or 17.2%, decrease over the three months ended December 31, 2024.

Other expense totaled $9.8 million for the three months ended December 31, 2025, a $1.3 million, or 15.3%, increase over the three months ended December 31, 2024.

Interest expense for the three months ended December 31, 2025 increased by $1.5 million, or 13.2%, from the corresponding three months of the previous year.

Personnel expense totaled $50.8 million for the three months ended June 30, 2026, a $5.1 million, or 11.1%, increase over the three months ended June 30, 2025.

Salary expense increased approximately $2.5 million, or 7.8%, during the quarter ended June 30, 2026, compared to the quarter ended June 30, 2025.

Severance related costs increased salary expense by $2.1 million in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026.

Our headcount as of June 30, 2026 remained relatively flat compared to June 30, 2025.

Benefit expense increased approximately $1.0 million, or 10.6%, when comparing the quarterly periods ended June 30, 2026 and 2025.

Incentive expense increased $3.3 million in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026.

The increase in incentive expense is primarily due to $2.0 million in CEO transition expense.

Occupancy and equipment expense totaled $12.0 million for the three months ended June 30, 2026, a $0.2 million, or 2.1%, increase over the three months ended June 30, 2025.

Advertising expense decreased $0.2 million, or 7.6%, in the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026 due to decreased spending on new customer acquisition programs.

Amortization of intangible assets totaled $0.8 million for the three months ended June 30, 2026, a $0.1 million, or 6.9%, decrease over the three months ended June 30, 2025.

Other expense totaled $10.4 million for the three months ended June 30, 2026, a $0.7 million, or 7.1%, increase over the three months ended June 30, 2025.

Interest expense for the three months ended June 30, 2026 increased by $1.8 million, or 18.6%, from the corresponding three months of the previous year.

Interest expense primarily increased due to a 27.6% increase in the average debt outstanding for the quarter, partially offset by a 6.4% decrease in the effective interest rate from 8.3% to 7.8%.

The average debt outstanding increased from $534.0 million to $625.4 million when comparing the quarters ended December 31, 2024 and 2025.

The Company’s debt-to-equity ratio increased from 1.3:1 at December 31, 2024 to 1.9:1 at December 31, 2025.

Other key return ratios for the three months ended December 31, 2025 included a 4.0% return on average assets and a return on average equity of 10.6% (both on a trailing 12-month basis), as compared to a 7.5% return on average assets and a return on average equity of 19.2% (both on a trailing 12-month basis) for the three months ended December 31, 2024.

The Company’s effective income tax rate was 10.1% for the three months ended December 31, 2025 compared to 16.4% for the corresponding period of the previous year.

The change was the result of a decrease in pretax book income relative to the effects of various permanent items, including an increase in disallowed executive compensation under Section 162(m) and the permanent tax benefit related to nonqualified stock option exercises and vesting of restricted stock treated as discrete items in the current quarter.

Comparison of nine months ended December 31, 2025 versus nine months ended December 31, 2024

Gross loans outstanding increased to $1.40 billion as of December 31, 2025, a 1.5% increase from the $1.38 billion of gross loans outstanding as of December 31, 2024.

Net loss for the nine months ended December 31, 2025 decreased to $1.5 million from the $45.5 million net income reported for the same period of the prior year.

Operating income (revenue less provision for credit losses and general and administrative expenses) decreased by $52.4 million, or 59.3%.

The significant decrease is primarily the result of an $18.5 million reversal of share based compensation expense in the second quarter of the previous year associated with the forfeiture of the shares granted in the second tranche of our performance-based share plan that resulted in negative share based compensation expense of $18.6 million.

Share based compensation expense for the nine months ended December 31, 2025 was $14.6 million, a $33.2 million increase compared to the same period of the prior year, mainly due to the prior year reversal noted above and share grants in December 2024 and June 2025.

The nine month period ended December 31, 2025 also included a $3.7 million expense for the early redemption of our long-term notes, which includes a $3.0 million early call penalty and a $0.7 million write-off of the remaining unamortized debt issuance costs.

Net loss was also negatively impacted by a $15.6 million increase in provision for credit losses, largely related to our new loan growth;

however, we expect solid returns on our fiscal 2025 and 2026 originations given early payment performance and yield.

Revenues increased by $8.6 million, or 2.2%, to $408.2 million during the nine months ended December 31, 2025 from $399.6 million for the same period of the prior year.

The increase was primarily due to an increase in outstanding balances and interest yields.

Interest and fee income for the nine months ended December 31, 2025 increased by $12.8 million, or 3.7%, from the same period of the prior year.

Net loans outstanding at December 31, 2025 increased by 1.5% over the balance at December 31, 2024.

Average net loans outstanding decreased by 0.1% for the nine months ended December 31, 2025 compared to the nine-month period ended December 31, 2024.

Insurance commissions and other income for the nine months ended December 31, 2025 decreased by $4.2 million, or 8.0%, from the same period of the prior year.

Insurance commissions decreased by approximately $1.8 million, or 4.9%, during the nine months ended December 31, 2025 when compared to the nine months ended December 31, 2024.

Other income decreased by $2.3 million, or 16.2%, during the nine months ended December 31, 2025 when compared to the nine months ended December 31, 2024.

The provision for credit losses increased $15.6 million, or 11.4%, to $151.8 million from $136.2 million when comparing the first three quarters of fiscal 2026 to the first three quarters of fiscal 2025.

Net charge-offs as a percentage of average net loans receivable on an annualized basis increased from 17.1% in the first three quarters of fiscal 2025 to 18.4% in the first three quarters of fiscal 2026.

G&A expenses for the nine months ended December 31, 2025 increased by $45.4 million, or 25.9%, from the corresponding period of the previous year.

As a percentage of revenues, G&A expenses increased from 43.8% during the first nine months of fiscal 2025 to 54.0% during the first nine months of fiscal 2026.

G&A expenses per average open branch increased by 29.4% when comparing the two nine-month periods.

The change in G&A expense is explained in greater detail below.

Personnel expense totaled $145.1 million for the nine months ended December 31, 2025, a $45.3 million, or 45.4%, increase over the nine months ended December 31, 2024.

Salary expense increased approximately $5.5 million, or 5.9%, when comparing the two nine month periods ended December 31, 2025 and 2024.

Our headcount as of December 31, 2025 increased 10.2% compared to December 31, 2024.

The increase is the result of annual salary increases and increased headcount in the field to further improve branch level performance.

Benefit expense increased approximately $2.3 million, or 10.0%, when comparing the nine month periods ended December 31, 2025 and 2024.

Incentive expense increased $38.0 million when comparing the nine month periods ended December 31, 2025 and 2024.

The increase in incentive expense is primarily due to a $33.2 million increase in share based compensation expense.

Share based compensation expense increased due to share grants in December of 2024 and June of 2025, and because the prior year period included a $18.5 million reversal of share based compensation expense associated with the forfeiture of the shares granted in the second tranche of our performance-based share plan.

Occupancy and equipment expense totaled $36.0 million for the nine months ended December 31, 2025, a $0.7 million, or 2.0%, decrease over the nine months ended December 31, 2024.

Occupancy and equipment expense is generally a function of the number of branches the Company has open throughout the period.

For the nine months ended December 31, 2025, the average occupancy and equipment expense per branch totaled $35.5 thousand, a $0.2 thousand, or 0.7%, increase when compared to the nine months ended December 31, 2024.

Advertising expense totaled $8.2 million for the nine months ended December 31, 2025, a $0.7 million, or 7.8%, decrease over the nine months ended December 31, 2024 due to increased efficiency in our customer acquisition programs.

Amortization of intangible assets totaled $2.4 million for the nine months ended December 31, 2025, a $0.5 million, or 16.7%, decrease over the nine months ended December 31, 2024.

Other expense totaled $28.6 million for the nine months ended December 31, 2025, a $2.1 million, or 7.8%, increase over the nine months ended December 31, 2024.

Interest expense for the nine months ended December 31, 2025 increased by $5.2 million, or 16.6%, from the corresponding nine months of the previous year.

Interest expense primarily increased due to a $3.0 million early call penalty on our long-term notes, and a $0.7 million write-off of the remaining unamortized debt issuance costs during the second quarter of fiscal 2026.

Additionally, there was a 4.7% increase in the average debt outstanding, from $508.5 million to $532.7 million.

The increase in interest expense was partially offset by a 3.4% decrease in the effective interest rate from 8.5% to 8.2%.

Other key return ratios for the first nine months of fiscal 2026 included a 4.0% return on average assets and a return on average equity of 10.6% (both on a trailing 12-month basis), as compared to a 7.5% return on average assets and a return on average equity of 19.2% (both on a trailing 12-month basis) for the first nine months of fiscal 2025.

The Company’s effective income tax rate was a negative 100.8% for the nine months ended December 31, 2025 compared to 20.1% for the corresponding period of the previous year.

The Company finalized a settlement with various taxing authorities that resulted in an increase in the reserve under ASC 740-10 (unrecognized tax positions) which is treated as a discrete item in the current period, along with a decrease in pretax book income relative to the effects of various permanent items including an increase in disallowed executive compensation under Section 162(m) in the current period.

This was partially offset by the

permanent tax benefit related to nonqualified stock option exercises and vesting of restricted stock treated as discrete items in the current period.

The average debt outstanding increased from $456.2 million to $582.3 million when comparing the quarters ended June 30, 2025 and 2026.

The Company’s debt-to-equity ratio increased from 1.1:1 at June 30, 2025 to 1.6:1 at June 30, 2026.

Other key return ratios for the three months ended June 30, 2026 included a 3.6% return on average assets and a return on average equity of 10.6% (both on a trailing 12-month basis), as compared to a 7.8% return on average assets and a return on average equity of 19.1% (both on a trailing 12-month basis) for the three months ended June 30, 2025.

The Company’s effective income tax rate was 22.7% for the three months ended June 30, 2026 compared to 30.2% for the corresponding period of the previous year.

The decrease was the result of a settlement with various taxing authorities that resulted in an increase in the reserve under ASC 740 (unrecognized tax positions) which was treated as a discrete item in the prior year quarter.

This was partially offset by an increase in disallowed executive compensation under Section 162(m) in the current quarter.

Regulatory Matters

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Since then, the CFPB issued a public designation order setting forth its determination that the Company has met the legal requirements for supervision (the "Order").

Pursuant to the terms of the Order, the CFPB has supervisory authority over the Company pursuant to section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010 until such time as the Order is terminated consistent with 12 C.F.R.

Pursuant to the terms of the Order, the CFPB has supervisory authority over

the Company pursuant to section 1024(a)(1)(C) of the Consumer Financial Protection Act of 2010 until such time as the Order is terminated consistent with 12 C.F.R.

Importantly, on May 12, 2025, the CFPB withdrew the Order, indicating that the CFPB "is shifting its supervisory priorities to focus on pressing threats to consumers" and that supervision of the Company "is not consistent with these priorities."

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The Company has generally applied its cash flows from operations to fund its loan volume, fund acquisitions, repay long-term indebtedness, and repurchase its common stock.

Net cash provided by operating activities for the nine months ended December 31, 2025 was $164.8 million.

As of December 31, 2025, the Company's debt outstanding was $677.2 million and its shareholders' equity was $351.6 million resulting in a debt-to-equity ratio of 1.9:1.0.

Net cash provided by operating activities for the three months ended June 30, 2026 was $64.4 million.

As of June 30, 2026, the Company's debt outstanding was $572.8 million and its shareholders' equity was $362.2 million resulting in a debt-to-equity ratio of 1.6:1.0.

Management will continue to monitor the Company's debt-to-equity ratio and is committed to maintaining a debt level that will allow the Company to continue to execute its business objectives, while not putting undue stress on its consolidated balance sheet.

The Company believes that attractive opportunities to acquire new branches or receivables from its competitors or to acquire branches in communities not currently served by the Company will continue to become available as conditions in local economies and the financial circumstances of owners change.

As of December 31, 2025, the Company had two credit facilities:

As of June 30, 2026, the Company had two credit facilities:

the Revolving Credit Facility and the Warehouse Facility.

1 unchanged sentence

Subject to a borrowing base formula, the Company could borrow at the rate of one month SOFR plus 0.10% and an applicable margin of 3.5% with a minimum rate of 4.5% under the Revolving Credit Agreement.

At December 31, 2025, the aggregate commitments under the Revolving Credit Agreement were $640.0 million.

At June 30, 2026, the aggregate commitments under the Revolving Credit Agreement were $655.0 million.

The borrowing base limitation was equal to the product of (a) the Company’s eligible finance receivables, less unearned finance charges, insurance premiums and insurance commissions applicable to such eligible finance receivables, and (b) an advance rate percentage that ranges from 70% to 80% based on a collateral performance indicator equal to the sum of, for the Company and certain of its subsidiaries (a) a three-month rolling average rate of receivables at least sixty days past due and (b) an eight-month rolling average net charge-off rate.

The Company had $789.7 thousand in outstanding standby letters of credit which include (i) $200.0 thousand related to worker's compensation expiring on October 16, 2026 and (ii) $589.7 thousand related to the Company's investment in captive insurance expiring on April 12, 2026.

The Company had $816.1 thousand in outstanding standby letters of credit which include (i) $200.0 thousand related to worker's compensation expiring on October 16, 2026 and (ii) $616.1 thousand related to the Company's investment in captive insurance expiring on March 01, 2027.

Both letters of credit automatically extend for one year on their expiration dates.

Further, under the Revolving Credit Agreement, the administrative agent has the right to set aside reasonable reserves against the available borrowing base in such amounts as it may deem appropriate, including, without limitation, reserves with respect to certain regulatory events or any increased operational, legal, or regulatory risk of the Company and its subsidiaries.

For the nine months ended December 31, 2025 and fiscal year ended March 31, 2025, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the Revolving Credit Agreement was 8.3% annualized and 9.5%, respectively.

At December 31, 2025, the unused amount available under the Revolving Credit Facility was $63.5 million.

For the three months ended June 30, 2026 and fiscal year ended March 31, 2026, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the Revolving Credit Agreement was 7.8% annualized and 8.3%, respectively.

At June 30, 2026, the unused amount available under the Revolving Credit Facility was $103.6 million.

Borrowings under the Revolving Credit Facility have a maturity date of July 22, 2028.

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The Warehouse Facility provides for a revolving $175.0 million warehouse facility and is secured by certain consumer loan receivables that were directly originated by certain of the Company’s subsidiaries.

As of December 31, 2025, the Company may borrow at the rate of one-month SOFR plus 0.11448% and an applicable margin of 3.00%, with a minimum rate of 4.00%.

As of June 30, 2026, the Company may borrow at the rate of one-month SOFR plus 0.11448% and an applicable margin of 3.00%, with a minimum rate of 4.00%.

The Credit Agreement has a commitment fee of 0.50% per annum on the unused portion of the commitment.

For the nine months ended December 31, 2025, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the Credit Agreement was 6.3%.

At December 31, 2025, the unused amount available under the Warehouse Facility was $73.5 million.

For the three months ended June 30, 2026, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the Credit Agreement was 7.9%.

At June 30, 2026, the unused amount available under the Warehouse Facility was $69.8 million.

Borrowings under the Warehouse Facility have an expected maturity date of September 29, 2027.

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Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the Revolving Credit Agreement.

Our first priority is

to ensure we have enough capital to fund loan growth.

As of December 31, 2025, subject to further approval from our Board of Directors, we could repurchase approximately $61.1 million of shares under the terms of our Revolving Credit Agreement.

Our first priority is to ensure we have enough capital to fund loan growth.

As of June 30, 2026, subject to further approval from our Board of Directors, we could repurchase approximately $63.8 million of shares under the terms of our Revolving Credit Agreement.

To the extent we have excess capital, we may repurchase stock, if appropriate and as authorized by our Board of Directors.

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Except as otherwise discussed in (i) this report including, but not limited to, any discussions in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q and (ii) Part I, Item 1A, "Risk Factors" in the Company's fiscal 2026 Annual Report (as supplemented by any subsequent disclosures in information the Company files with or furnishes to the SEC from time to time), management is not currently aware of any trends, demands, commitments, events or uncertainties that it believes will or could result in, or are or could be reasonably likely to result in, any material adverse effect on the Company’s liquidity.

Revolving Credit Facility

Revolving Credit Facility Debt Covenants

The Revolving Credit Agreement contains a number of affirmative and negative covenants that, among other things, restrict our ability to incur liens, incur indebtedness, pay dividends and repurchase or redeem capital stock, make certain restricted payments, merge or consolidate, dispose of assets, make acquisitions or other investments, redeem or prepay subordinated debt, amend subordinated debt documents, make changes in the nature of its business, and engage in transactions with affiliates.

The agreement allows the Company to incur subordinated debt that matures after the termination date of the Revolving Credit Agreement and that contains specified subordinated terms, subject to limitations on amount imposed by the financial covenants under the Revolving Credit Agreement.

In addition, the Revolving Credit Agreement requires the Company to (i) keep and maintain a Consolidated Net Worth of $325.0 million, (ii) have a ratio of Net Income Available for Fixed Charges to Fixed Charges of not less than 2.25 to 1.00, (iii) not permit the aggregate unpaid principal amount of Total Debt to exceed 225.0% of Consolidated Adjusted Net Worth, and (iv) maintain an Asset Quality Indicator (Consolidated) of less than or equal to 26.0%.

On May 22, 2026, the Company entered into a Consent and Limited Modification to Fixed Charge Ratio (the "Modification") with Bank of Montreal, as Administrative Agent and Collateral Agent, and the Required Lenders party to the Revolving Credit Agreement dated as of July 22, 2025 (as amended or otherwise modified from time to time), by and among the Company, the lenders from time to time party thereto, and BMO, as Administrative Agent and Collateral Agent.

Pursuant to Section 8.7(b) of the Revolving Credit Agreement, the Company and its Restricted Subsidiaries are required to maintain a ratio of Net Income Available for Fixed Charges to Fixed Charges (the "Financial Covenant") of not less than 2.25 to 1.0 for each fiscal quarter.

The Modification provides for a limited, temporary modification of the Financial Covenant as follows:

2.20 to 1.0 as of the fiscal quarter ending March 31, 2026;

2.10 to 1.0 as of the fiscal quarter ending June 30, 2026;

2.15 to 1.0 as of the fiscal quarter ending September 30, 2026.

Commencing with the fiscal quarter ending December 31, 2026, and for all fiscal quarters thereafter, the Financial Covenant shall revert to its original level of not less than 2.25 to 1.0, without regard to the limited modification set forth in the Modification.

Except as expressly modified by the Modification, the Revolving Credit Agreement remains in full force and effect in accordance with its current terms.

.In addition, the Revolving Credit Agreement requires the Company to (i) keep and maintain a Consolidated Net Worth of $325.0 million, (ii) not permit the aggregate unpaid principal amount of Total Debt to exceed 225.0% of Consolidated Adjusted Net Worth, and (iii) maintain an Asset Quality Indicator (Consolidated) of less than or equal to 26.0%.

Each of the capitalized terms used and not defined herein have the meanings set forth in the Revolving Credit Agreement.

The Company was in compliance with these covenants at December 31, 2025, after giving effect to an agreement related to the treatment of the payment of early call premiums in connection with Redemption, and does not believe that these covenants will materially limit its business and expansion strategy.

The Revolving Credit Agreement also contains customary events of default (subject to certain materiality thresholds and cure periods), including among others, (a) non-payment, (b) non-compliance with covenants, (c) a breach of a representation or warranty, (d) an insolvency event involving the Company, (e) a change in control of the Company, (f) failure of the Company to maintain certain financial covenants, (g) cross-default to other debt, (h) invalidity of subordination provisions of subordinated debt, (i) the occurrence of certain regulatory events (including an order or judgment entered against the Company with respect to the financial receivables generally or any category of receivables that is material to the business) which remains unvacated, undischarged, unbonded or unstayed by appeal or otherwise for a period of 60 days from the date of its entry and is reasonably likely to cause a material adverse change, and (j) payment defaults resulting in acceleration of securitizations or warehouse facilities that remain continuing for more than 30 days.

Warehouse Facility

The Credit Agreement contains affirmative and negative covenants, including covenants that generally restrict the ability of the Company and its subsidiaries to, among other things, incur or guarantee indebtedness, incur liens, pay dividends and repurchase or redeem capital stock, engage in mergers and consolidations, make acquisitions or other investments, or fund benefit plans.

The Company’s financial covenants under the Credit Agreement include (i) a minimum net worth of $305.0 million;

(ii) a maximum ratio of debt to net worth of 2.25 to 1.0 as of the end of each fiscal quarter;

The Company was in compliance with these covenants at June 30, 2026, after giving effect to the Consent and Limited Modification to the Net Income Available for Fixed Charges to Fixed Charges ratio.

The Company does not believe that these covenants will materially limit its business and expansion strategy.

The Revolving Credit Agreement also contains customary events of default (subject to certain materiality thresholds and cure periods), including among others:

(a) non-payment, (b) non-compliance with covenants, (c) a breach of a representation or warranty, (d) an insolvency event involving the Company, (e) a change in control of the Company, (f) failure of the Company to maintain certain financial covenants, (g) cross-default to other debt, (h) invalidity of subordination provisions of subordinated debt, (i) the occurrence of certain regulatory events (including an order or judgment entered against the Company with respect to the financial receivables generally or any category of receivables that is material to the business) which remains unvacated, undischarged, unbonded or unstayed by appeal or otherwise for a period of 60 days from the date of its entry and is reasonably likely to cause a material adverse change, and (j) payment defaults resulting in acceleration of securitizations or warehouse facilities that remain continuing for more than 30 days.

Warehouse Facility Debt Covenants

The Credit Agreement contains affirmative and negative covenants, including covenants that generally restrict the ability of the Company and the Borrower to, among other things, incur or guarantee indebtedness, incur liens, pay dividends and repurchase or redeem capital stock, engage in mergers and consolidations, make acquisitions or other investments, or fund benefit plans.

The Company’s financial covenants under the Credit Agreement include:

(i) a minimum tangible net worth of $305.0 million;

(ii) a maximum ratio of debt to tangible net worth of 2.25 to 1.0 as of the end of each fiscal quarter;

(iii) a minimum liquidity amount of $35.0 million;

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Each of the capitalized terms used and not defined herein have the meanings set forth in the Credit Agreement.

The Company was in compliance with these covenants at December 31, 2025 and does not believe that these covenants will materially limit its business and expansion strategy.

Company, the Borrower, or the Originators, (g) a change in control of the Company or the Borrower, (h) an event of default under a material financing agreement of the Company, the Borrower, or the Originators, (i) failure of the Company, as Servicer, to maintain certain financial covenants, and (j) the Company, the Borrower, or the Originators have one or more final non-appealable judgments entered against it by a court of competent jurisdiction in excess of the specified monetary thresholds.

The Company was in compliance with these covenants at June 30, 2026 and does not believe that these covenants will materially limit its business and expansion strategy.

The Credit Agreement also contains customary events of default (subject to certain materiality thresholds and cure periods), including among others, (a) non-payment, (b) non-compliance with covenants, (c) failure of the Administrative Agent to maintain a first-priority perfected security interest in any material portion of the collateral (subject to permitted liens), (d) the occurrence of a servicer termination event, (e) a breach of a representation or warranty, (f) an insolvency event involving the Company, the Borrower, or the Originators, (g) a change in control of the Company or the Borrower, (h) an event of default under a material financing agreement of the Company, the Borrower, or the Originators, (i) failure of the Company, as Servicer, to maintain certain financial covenants, and (j) the Company, the Borrower, or the Originators have one or more final non-appealable judgments entered against it by a court of competent jurisdiction in excess of the specified monetary thresholds.

The remedies for such events of default are also customary for this type of transaction and include acceleration of the Borrower’s outstanding obligations under the Credit Agreement.

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As a result of the Redemption, the Company recognized an additional $3.7 million in interest expense, for which $3.0 million represents an early redemption premium and $0.7 million represents the write-off of the remaining unamortized debt issuance costs associated with the Notes.

During the nine months ended December 31, 2025 and prior to the Redemption, the Company repurchased and extinguished $17.0 million of its Notes, net of $0.1 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $17.0 million.

During fiscal 2025, the Company repurchased and extinguished $89.0 million of its Notes, net of $0.6 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $88.0 million.

No loss on extinguishment was recognized for the three months ended December 31, 2025.

For the nine months ended December 31, 2025, the Company recognized a $3.7 million loss on extinguishment.

For the three and nine months ended December 31, 2024, the Company recognized a $50.0 thousand loss on extinguishment and a $1.2 million gain on extinguishment, respectively.

In accordance with ASC 470, the Company recognized the gain and loss on extinguishments as a component of interest expense in the Company's Consolidated Statements of Operations.

During fiscal 2026 and prior to the Redemption, the Company repurchased and extinguished $17.0 million of its Notes, net of $0.1 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $17.0 million.

For the three months ended June 30, 2025, the Company recognized a $43.0 thousand loss on extinguishment.

In accordance with ASC 470, the Company recognized the loss on extinguishments as a component of interest expense in the Company's Consolidated Statements of Operations.

Share Repurchase Program

On July 22, 2025, the Board of Directors authorized the Company to repurchase up to $100.0 million of the Company’s outstanding common stock, inclusive of the amount that remained available for repurchase under prior repurchase authorizations.

As of December 31, 2025, the Company had $18.4 million in aggregate remaining repurchase capacity under its current share repurchase program.

On February 11, 2026, the Board of Directors authorized the Company to repurchase up to $50.0 million of the Company’s outstanding common stock, inclusive of the amount that remained available for repurchase under prior repurchase authorizations.

As of June 30, 2026, the Company had $10.0 million in aggregate remaining repurchase capacity under its current share repurchase program.

The timing and actual number of shares repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, available funds, alternative uses of capital, restrictions under the Revolving Credit Agreement, and other market and economic conditions.

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Profit Sharing (the "Sellers") in a privately negotiated transaction.

The Sellers are affiliates of Prescott General Partners, LLC, who, along with its affiliates, beneficially own approximately 43.6% of the Company's common stock as of December 31, 2025.

The Sellers are affiliates of Prescott General Partners, LLC, who, along with its affiliates, beneficially own approximately 46.3% of the Company's common stock as of June 30, 2026.

The $172.88 price per share was the closing market price at September 3, 2025.

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Our first priority is to ensure we have enough capital to fund loan growth.

As of December 31, 2025, subject to further approval from our Board of Directors, we could repurchase approximately $61.1 million of shares under the terms of our Revolving Credit Agreement.

As of June 30, 2026, subject to further approval from our Board of Directors, we could repurchase approximately $63.8 million of shares under the terms of our Revolving Credit Agreement.

To the extent we have excess capital, we may repurchase stock, if appropriate and as authorized by our Board of Directors.

The Company does not believe that inflation will have a materially adverse effect on its financial condition, unless changes in inflation are particularly severe and sudden in nature.

Although inflation would increase the Company’s operating costs in absolute terms, the Company expects that the same decrease in the value of money would result in an increase in the size of

loans demanded by its customer base.

Although inflation would increase the Company’s operating costs in absolute terms, the Company expects that the same decrease in the value of money would result in an increase in the size of loans demanded by its customer base.

It is reasonable to anticipate that such a change in customer preference would result in an increase in total loans receivable and an increase in absolute revenue to be generated from that larger amount of loans receivable.

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Relevant available information includes historical credit loss experience, current conditions, qualitative factors, and reasonable and supportable forecasts.

Share-Based Compensation

The Company measures compensation cost for share-based awards at fair value and recognizes compensation over the service period for awards expected to vest.

The fair value of restricted stock is based on the number of shares granted and the quoted price of the Company’s common stock at the time of grant, and the fair value of stock options is determined using the Black-Scholes valuation model.

The Black-Scholes model requires the input of assumptions, including expected volatility, risk-free interest rate and expected life.

Management uses certain assumptions and estimates in determining income taxes payable or refundable, deferred income tax liabilities and assets for events recognized differently in its financial statements and income tax returns, and income tax expense.

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No assurance can be given that either the tax returns submitted by management or the income tax reported on the consolidated financial statements will not be adjusted by either adverse rulings, changes in the tax code, or assessments made by the IRS, state, or foreign taxing authorities.

The Company is subject to potential adverse adjustments, including but not limited to:

an increase in the statutory federal or state income tax rates, the permanent non-deductibility of amounts currently considered deductible either now or in future periods, and the dependency on the generation of future taxable income in order to ultimately realize deferred income tax assets.

The Company is subject to potential adverse adjustments, including, but not limited to, an increase in the statutory federal or state income tax rates, the permanent non-deductibility of amounts currently considered deductible either now or in future periods, and the dependency on the generation of future taxable income in order to ultimately realize deferred income tax assets.

Under FASB ASC Topic 740, the Company will include the current and deferred tax impact of its tax positions in the financial statements when it is more likely than not (likelihood of greater than 50%) that such positions will be sustained by taxing authorities, with full knowledge of relevant information, based on the technical merits of the tax position.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis